Dark Mode Light Mode

ACCC Calls For Tougher Laws To Regulate Loyalty Schemes

Broader legislative reforms are required to protect consumers using loyalty schemes, according to the ACCC’s final report into customer loyalty schemes released today.

The ACCC commenced its review of customer loyalty schemes in early 2019, and identified significant problems with the programs which include frequent flyer, supermarket and credit card operators.

A key focus of the report is how the schemes collect and use consumer data, and how little consumers know about what goes on behind the scenes when they are collecting points for shopping.

Advertisement

The report recommends loyalty schemes better inform consumers, improve their data practices and stop automatically linking members’ payment cards to their loyalty scheme profiles. It also calls for broader changes to consumer and privacy law.

The ACCC is also concerned that the profiling of consumers based on the data collected by some schemes, including through the sharing of consumer insights with third parties, could result in consumers receiving increasingly targeted advertising. This could also potentially result in different consumers being offered different prices for an identical product or service.

“Many consumers are increasingly concerned about receiving targeted advertising, in some cases from companies that they have never dealt with before,” ACCC Chair Rod Sims said.

“There is also an emerging risk of real consumer harm if individual consumers were to be charged inflated prices based on profiling derived from their data. For example, if a person’s frequent flyer data or online search history indicates they can only travel on certain dates, or otherwise based on their income, geographic location or other information collected through the loyalty scheme they may be charged extra,”

Another major concern identified in the report are privacy policies, which the ACCC described as very vague and seeking broad consents and discretions from consumers about how they’re going to collect, use and disclose their data.

“Many consumers would be shocked to find that some supermarket schemes continue to collect their customers’ data at the checkout even when they do not present their loyalty cards. They do this by tracking customers’ credit or debit cards from previous transactions,” Sims said.

“When a customer chooses not to present their loyalty card, we think it is reasonable that they would not expect their data to be collected for that transaction, and we are therefore calling on the relevant schemes to stop this practice.”


This article originally appeared in Which50.

Author

Keep Up to Date with the Most Important News

By pressing the Subscribe button, you confirm that you have read and are agreeing to our Privacy Policy and Terms of Use
Add a comment Add a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Previous Post

Christmas gifts are better received when they’re badly wrapped: Study

Next Post

Thrive Global Names Frank Ricciardi First Chief Customer Officer

Advertisement

Subscribe to Customerland

Customer Enlightenment Delivered Directly to You.

    Get the latest insights, tips, and technologies to help you build and protect your customer estate.